All Forum Posts by: Eric Black

Hi Tim,

Is this a property you already own or are purchasing? If you're purchasing it then you need to run the numbers. Let's look at a $100,000 property. If you put 20% down to avoid paying PMI that means you have to put $20,000 down. If you put less down and pay PMI I'm assuming it would be around $75/mo but you'd need to consult with your lender to find out exactly what they would charge. One thing to think about is that with a lot of lenders, after you have owned the property for 2 years, if the property has appreciated enough to where what you owe is 80% or less than the current value they will eliminate the PMI. My wife and I recently did this and we're now saving $119/month!

Again, it's going to depend on the exact numbers of your property.

Cheers!

Welcome @Clifford McComb. What you heard was definitely true, this is the best place to learn. Get involved and ask questions. Everyone here was a beginner at one time. Check out the Ultimate Beginner's Guide if you haven't already and also check out J Scott's book on flipping houses.

Cheers!

@Prolet Miteva  We used Redwood Credit Union, who we have been members of for years. We just didn't realize they offered HELOCs on investment properties. I think they go up to 85% but if you go 80% or below it's zero closing costs. Hope this helps!

Cheers!

Hi Deborah,

A hedge fund is more like a mutual fund but they often don't invest in stocks. So you would turn your money over to said hedge fund and they would invest that money on your behalf how they see fit. Often they will buy real estate as part of their portfolio. You have no control over what they invest in, when they buy or when they sell. Again, it's similar to putting money into a mutual fund in your 401k or brokerage account. You let them handle choosing when and what to buy and sell. I'm not sure I understand the last question about talking to a hedge fund vs "bank bidder".

Hi Warner,

I think if you do a search you'll find there are many people who have done Subject To deals. So to answer your question. Yes. :)

Cheers.

Eric

We're on the lookout again. Can anyone recommend an investor friendly RE agent in Brevard County, FL? Cheers!

Hi Bruce,

Condos can be tricky with their assessments and all. When you say "all bills paid" by the HOA, what exactly does that include? Taxes? Insurance? Utilities? You still need to factor in vacancy and internal maintenance...and the dreaded assessment. One big key you left out that will prevent anyone from giving you accurate input is, what will the unit rent for each month? Or will you be looking to live in the unit?

Cheers!

Eric

Welcome Diana! You've come to the right place. I recommend looking around, get involved and check out the Ultimate Beginners Guide www.biggerpockets.com/ubg.

You'll have to tell us a little more about what you're looking to do before we can give you any tips. :)

Cheers!

Eric

Barrett, there is also a list of hard money lenders under the Resources tab here on BP.

I would recommend getting a mold remediation company into the property to give you a quote. It can be expensive but shouldn't kill your deal. You want to be sure to go with a licensed company however so they can give you a certificate confirming that the mold is gone. That way if anything happens down the road they'll be liable.

Cheers!

Hi Patty,

Congratulations on your decision and you've found the right place to help you get there.

Entity creation and structuring is a commonly debated topic on BP and elsewhere and there's no black and white answer.

What kind of investing will you be doing? Buy and hold? Flipping? Wholesaling? If doing buy and hold then my opinion would be not to set one up until you have at least 3 or 4 properties. Again, just my opinion. If you're flipping then I might consider it as a form of protection should the buyer find a reason to come after you. Possibly the same with wholesaling but if you play by the rules with wholesaling then there shouldn't be too much risk of being sued.

Where should you set one up? Well, since you (and I) live in the business friendly bleeding heart state it doesn't matter where you set it up. If you set up the LLC in Nevada (which I wouldn't recommend), Wyoming or any other LLC friendly state you'll still have to pay the $800 fee to the state of California even if the property is not in California. There are ways around this but it's very difficult. If you get even 1 piece of mail in California related to the LLC then technically you'll be required to file in California. I would advise talking to an attorney in California who is familiar with entity structuring. Again, there's no benefit in filing in another state since you live in California.

Best of luck!

Eric